Snapchat, a popular mobile messaging service has announced integration of a peer-to-peer payment system called Snapcash. By partnering with the payment service Square, users that are 18 or over that are located in the US can connect their debit cards to their account and instantly send money to friends by typing the dollar sign, the amount, and pressing the new green pay button. When money is sent, it is deposited directly into your friends bank account. P2p payments are growing increasingly popular. By partnering with Square, Snapchat does not need to take on the challenge of storing sensitive data themselves. Square has been a very successful payment service and has integrated Bitcoin payments into their payment systems earlier this year. Though Square supports Bitcoin use, Snapchat users will not have the ability to send Bitcoin to one another.
Snapchat announced the launch of Snapcash in a recent blog post:“Today is a big day for us – we are launching our first product created in partnership with another company. We’re huge fans of the folks at Square and have been big admirers of Square Cash since it launched – just type a dollar amount into the subject line of an email and send cash to friends. Genius! We loved it so much that we wanted to create something with them that felt Snapchat-y. So we built a Snapcash prototype and shared it with the team at Square. Luckily for us, they were just as excited as we were and wanted to build it together.” In addition to the blog post, Snapchat also created a video promoting their new product.
In the video, it does not appear that there is any type of confirmation of payment prior to sending it, which could cause problems. Also, Snapcash has the potential to lead to a very large number of charge-backs and bank fees for users that accidentally send money that they don’t own. In addition to the potential problem for charge-backs and bank fees, the Snapchat app itself is not password protected, making it potentially dangerous to use the service unless the user logs out after each use. If someone where to acquire your phone that wasn’t password protected, they could drain your bank account through Snapchat.
Though there are several security concerns, Snapchat is now positioned to be a competitive force in the p2p payment industry. Users that wouldn’t have considered downloading a finance app such as Paypal might now have incentive to hop on the p2p wagon. Sending money to friends quickly and easily is one of the core features of any cryptocurrency. Though Snapchat has not announced any plans to integrate Bitcoin, it is possible we will see it in the future. There has already been talk of several payment industry giants integrating Bitcoin into their platforms.
Competition for Gems?
The Gems social media platform launches in a few weeks. With Gems, users are rewarded by introducing new users to the network and are also paid gems for viewing advertisements. Advertisers must pay gems to send unsolicited content to users of the platform. Gems also features encrypted instant messaging and the ability to instantly send gems to friends and family. With Snapchat’s new Snapcash feature, there might be some competition for Gems, though Gems functions more like a cryptocurrency. Gems is powered by Counterparty and each user will be given their own Gems wallet. The address of the wallet becomes their username, so sending gems between friends is incredibly easy.
The p2p payment movement is growing exponentially and giant companies are competing to gain higher stakes in it than their competitors. While Snapcash does not currently support Bitcoin, it might be a feature we see integrated in the future. Snapcash will likely become very popular among its users and further increase the demand for easy, cheap, p2p payment solutions. Snapcash is currently only avaliable on Android, though it will be integrated into IOS shortly.
Edit: Snapcash has now been integrated onto the IOS app and is available for users that are 18+ with a debit card.